The Supreme Court will review a $1.24 million defamation judgment against a Wisconsin airline that reported one of its pilots as mentally unstable and caused him to be arrested.

The justices said Monday they will hear an appeal from Air Wisconsin that claims it is shielded under federal law from the defamation claims of veteran pilot William Hoeper.

Hoeper’s job was in jeopardy after he failed for a fourth time to win airline approval to fly a new aircraft and had an angry exchange with another employee at a Virginia training facility.

Later that day, Hoeper was a passenger on a United Airlines flight to Denver that was ordered to return to its gate after Air Wisconsin identified Hoeper as a potential threat to the Transportation Security Administration. He was removed from the plane, searched and questioned, but never charged.

He filed a defamation lawsuit against the airline in Colorado, where he lives. A jury found that statements airline officials made about Hoeper were defamatory.

Air Wisconsin said the lawsuit should have been dismissed because of a broad grant of immunity to airlines that report potential security threats under the Aviation Transportation Security Act, passed after the September 11 attacks.

The Colorado Supreme Court ruled that the airline was not shielded from the lawsuit and upheld the verdict.

The Obama administration joined the airline in calling for Supreme Court review and reversal of the Colorado court decision. The administration said that upholding the verdict against Air Wisconsin would discourage other airlines from reporting potential security threats to TSA.